Tarnished Rings

Abstract

The Salt Lake City Olympic scandal that surfaced in 1998 completely devastated the international community that is the Olympic Games. The purpose of this paper is to explore the causes of, the ethical issues associated with, and the strategic changes made because of the Olympic disgrace. Beginning in 1991, the instrumental individuals charged with bringing the Olympic Games to Salt Lake City changed their social, marketing, and ethical philosophies. As a result, the biggest bribery scandal to ever hit the Olympics took place. Consequently, changes can now be seen in the strategic choices made by prospective Olympic cities. 

More than a year has passed since media and ethics committee reports condemned the Salt Lake City Organizing Committee (SLCOC) for allegedly bribing International Olympic Committee (IOC) members for votes in order to have the 2002 Winter Games. Amidst the massive reform and economic upheaval of Olympic marketing and social norms, it is necessary to investigate the fundamental issues that led to this international travesty. Specifically, it is necessary to ask three questions: 1) What led the members of the SLCOC to offer bribes and what led to the members of the IOC to solicit and accept bribes? 2) What ethical principles do the persons in charge of organizing committees maintain? and 3) What changes are observed and can be expected in future bids to host the Olympic Games? It is our contention that these questions can be answered by looking at the changing philosophy of bid committees and the IOC since the 1984 Olympic Games in Los Angeles. Thus, the purpose of this paper is to further flesh out the intricacies of, and offer possible answers to, these questions.

Philosophical change

In order to further delve into this examination, we must fully understand the circumstances and ramifications of the bribery scandal that rocked Salt Lake City and the Olympic community. According to Pound and Johnson (1999), the entire event began to take place in June 1991 in Birmingham, England, when Thomas Welsh, president of the SLOC, arrived anticipating the IOC to name Salt Lake City as the host of the 1998 Winter Games. The evening before the vote, Welsh was approached by two agents representing IOC members who sought cash payments in exchange for votes. Welsh refused the offer, and the next day, the 1998 Winter Games were awarded to Nagano, Japan, by a vote of 46-42 (Pound & Johnson, 1999). 

When the time came for the SLOC to campaign for the 2002 Games, Welsh and the other members of the committee took a different approach, leading to the biggest Olympic corruption scandal to date (Pound & Johnson, 1999). This time, Salt Lake City bidders paid more than $1.2 million in cash, medical care, tuition and travel expenses to buy votes that helped win the 2002 Winter Games (Siddons, 1999a). On numerous occasions, the SLOC broke the $150 maximum allowance allocated for gifts to IOC members (Mwangi, 1999). According to Dick Pound, head of a panel that investigated the corruption, certain IOC members were given packages of cash and gifts in excess of $100,000 in exchange for votes (Siddons, 1999b). Some members, such as Kenya’s Charles Mukora, received payments in the form of donations to the country’s youth sporting activities (Mwangi, 1999). Additionally, the IOC members were given first-class airline tickets that could be traded in for cash or lesser tickets (“Report: Air,” 1999). 

But the SLOC did not just make cash payments to the IOC members. Jean-Claude Ganga, a representative from the Republic of Conga, and family members received in excess of $250,000 in medical care, travel and other payments of cash and gifts (“SLOC releases,” 1999). Other perks included a two-week vacation for Agustin Arroyo, a member from Ecuador, and his family to Park City, Utah – a vacation that cost $10,000 (Pound & Johnson, 1999). Even IOC president Juan Antonio Samaranch received payments from a Salt Lake booster in the form of a $9,000 limited edition pistol (Pound & Johnson, 1999). A Cameroon IOC member, Rene Essomba, not only received $60,000 in direct payments, but also had his daughter’s tuition and living expenses paid for while she attended American University in Washington, D.C. (Pound & Johnson, 1999). Phillip Coles of Australia and Willi Kaltschmitt of Guatemala and their families received several trips to the U.S., including a $19,991 paid trip to the Super Bowl (“Report implicates,” 1999).

Consequences of the corruption

The fallout from the Salt Lake City scandal has been catastrophic for both the SLOC and IOC due to the backlash of negative publicity, loss of potential revenues, and the widespread talk of the corruption in the bid process. The Independent Ethics Committee named Welsh and Dave Johnson, longtime partner of Welsh in directing the movement, as the main culprits behind the bribery from the SLOC (“Olympic ethics,” 1999). Welsh resigned from the SLOC in 1997 in the wake of spousal abuse charges, and Johnson was asked to resign in January of 1999 after the bribery scandal broke (“Olympic ethics,” 1999). Despite these charges, the United States Justice Department did not indict the SLOC, or its members (Shipley, 2000). Members of the SLOC later released a secret document related to the bid scandal. Beside the name of eight IOC members was the word “geld” – the German word for money (“Samaranch glad,” 2000). Included in the memo was a description of personal idiosyncrasies and family needs of the cited IOC members – such as health, family, or occupational needs. 

The response from Lausanne, home of the IOC, was direct and aimed at preventing further damage. The International Olympic Committee has long held policies and procedures, via the Olympic Charter, concerning conduct of Olympic constituents for some time. For instance, item 10 under the “Role of the IOC” states that the IOC is opposed to any form of political or commercial profanation of sport or players. Additionally, the bid committee and IOC members were aware of the maximum limit ($150 U.S.) allotted for the entertainment and hospitality of IOC members. Despite the imposed guidelines and principles, members of the SLOC and IOC chose to break the IOC mandates. In turn, the scandal led to the resignation or expulsion of 10 IOC members (Shipley, 2000). In response to these infractions, the IOC implemented several tactics to prevent further damage. 

Initially, the IOC accepted the proposal from Judge Keba Mbaye to amend the 2006 bid selection process. Among the reforms proposed was the prohibition of visits to sites by IOC members, the call for an election college, the formation of an Ethics Commission, and the creation of a reform commission, IOC 2000. Among the responsibilities of the Ethics Commission, whose members include such high ranking persons as former Swiss President Kurt Furgler and former White House Chief of Staff Howard Baker, was to ensure that ethical consideration for members of the IOC are definite, utilized, and enforced. Listed among the first rules in the newly drafted Code of Ethics was the clear statement that “Olympic parties or their representatives shall not…solicit, accept or offer concealed remuneration, commission, benefit, or service” concerning the Olympic Games in any manner. The Code of Ethics also emphasized the limiting of hospitality to the bid country’s standards. The Commission was also to annually publish a report as to the ethical conduct of Olympic stakeholders.

Violations at other Olympic sites 

Although Salt Lake City is the most notable city to have bribed IOC members in exchange for votes, it is not the only one. In a bid to host the 1996 Summer Games, Toronto paid the summer apartment rent of IOC member Pirjo Haeggman’s husband, Bjarne (“Report: Air,” 1999). According to The Australian newspaper, members of the Sydney bid team spent close to $150,000 in transporting seven rare horses to the Gobi Desert for Mongolian IOC member Shagdarjav Magvan (“Horses involved,” 1999). Additionally, John Coates, the head of the Australian Olympic Games, reported that he offered $70,000 to two African IOC members on the eve of the 1993 vote (Wilson, 1999). Charlie Battle, a top official for the Atlanta organizing committee, admitted that the monetary limit imposed by the IOC for gifts to IOC members was breached in Atlanta’s push for the 1996 Games (“Report: Atlanta,” 1999). Here, IOC delegates were presented with golf clubs valued at $475, free travel for families, and a bulldog for Cuban representative Manuel Gonzalez Guerra (“Report: Atlanta,” 1999). In an unsuccessful bid to land the 2000 Olympic Games, the Berlin government paid $1.5 million, or around $23,000 a head, for the trips of over 50 IOC members (“Berlin Olympic,” 1999). The total bid, which included medical care and free tickets to the Berlin Philharmonic Orchestra, cost Berlin $48 million (“Berlin Olympic,” 1999).

Perhaps the most gross violations, other than that of Salt Lake City, occurred in Nagano in that city’s bid for the 1998 Games. The Nagano mayor, Tasuku Tsukada, admitted that the city violated the IOC regulations in wooing IOC votes (Wilson, 1999). Among the gifts presented to the members were all-expense paid trips to the ancient capitol of Kyoto, coupled with expensive paintings and a sword to Samaranch (Wilson, 1999). Others extravagancies included spending over $2 million while entertaining officials in Birmingham, the site of the 1991 vote for the 1998 Winter Games (“Private notes,” 1999).

Reasons for the corruption

Upon seeing these gross violations by numerous bid cities across the globe, we must ask what causes such activity. The answer – the Olympic Games have become a gigantic moneymaker not only for the IOC, but for the host city as well. According to Russian representative Vitaly Smirnov, the scandal stems from the increased commercialization of the Games (Mwangi, 1999). Smirnov stated that “the more money is involved in big sports, the bigger the temptation to touch them” (Mwangi, 1999). But Smirnov is not the only one to hold such views. According to the Vancouver Sun newspaper, big money from corporate sponsors has “become as integral to the Olympic Games as gold medals and flowers” (“The New Gold,” 1996, p. C1). Melissa Turner of The Atlanta Journal-Constitution concurred when she stated that the Olympic Games had become “…too commercial, a shameless sellout to corporate sponsors and television moguls” (Turner, 1996, p. S36). In addition to the economic windfall accompanied with hosting the Olympic Games, other benefits are accrued by the host city as well, such as improved infrastructures and numerous social benefits. 

The Olympic Games have had corporate sponsors since their inception in 1896, and companies, such as Olympia cigarettes in 1964, have made money from sponsorship associated with the Games for some time (Drozdiak, 1996). However, the true unfolding of the financial development of the Olympics began in the 1984 Games in Los Angeles (Turner, 1992; Farrey, 1995). Coca-Cola was one of the largest sponsors of the 1984 Games, spending $12.6 million for sponsorship rights and $34 million in commercial time on ABC (Turner, 1992). Since the 1984 Olympic Games, the sponsorship packages have grown larger and more lucrative than ever. Indeed, the IOC has turned the Games into a money bonanza and one of the most prosperous and remunerative media sports events of all time (Coakley, 1998). NBC, who had not televised the Games since 1972, paid $300 million in 1988 for the rights to the Summer Games in Seoul (Slack, 1997). The 1996 Games in Atlanta boasted over $1.6 billion in revenue, of which $560 million was in television rights and $400 million in sponsorship fees (“The New Gold,” 1996). Presently, major corporate sponsors pay in the range of $40 million in cash, goods, and services for the privilege to be linked with the Olympic Games (Roush & Unger, 1996). NBC, for example, signed a deal to retain television rights through the 2008 Games for $5.5 billion (Drozdiak, 1996).

There are those that argue that sponsorship has aided the Games and the Olympic community as a whole. Samaranch, for example, stated that in order “to organize the Games, you need money. If it does not come from the state, then it must come from the private sector. And happily, sports and television have proved to be the perfect marriage” (Drozdiak, 1996, p. A1). Indeed, in the United States, where the federal government does not provide any financial support, corporate wallets and licensing agreements compile the largest source of revenue for the United States Olympic Committee (Morgan, 1992). According to Olympic Historian John Lucas, corporate money has also allowed more athletes from varying countries to participate: “The Games were so small and growth so limited for such a long time, poor countries never came, African nations never came. They will all be coming to Atlanta. Thank you, American dollar bills” (cited in Turner, 1996, p. S36).

But viewpoints such as these appear to be the exception, not the rule. According to Roone Arledge of ABC News, the Olympic Games are a commercial venture that tries every four years to capitalize on as much potential revenue as possible (Coakley, 1998). This viewpoint was echoed by John Horan of the ‘Sporting Goods Intelligence’ group when he said the Games were no longer a fight of the Free World against Communism, but rather a battle of the shoe companies, Reebok and Nike (Coakley, 1998). It is this extraordinary amount of money that has led to the misuse of funds by Olympic organizing committees, such as the one in Salt Lake City. It is necessary here to reiterate the feelings of Russian IOC representative Vitaly Smirnov, who stated that the root of the scandal in Salt Lake City stemmed from the augmented commercialization of the Games (Mwangi, 1999). After all, it is not just the IOC that profits from the corporate deals, but also the city that hosts the Games (Coakley, 1998). Although this may not have been as profitable in past years, corporate dollars in Atlanta alone reached $300 million, and the amount continues to escalate (Coakley, 1998). Estimations for U.S. broadcast rights to the 2008 Games are at a staggering $894 million (Coakley, 1998).

Ethical considerations

At this time, it is necessary to pose another question; what ethical standards, if any, are the organizing committees of prospective Olympic sites incorporating? According to the Markkula Center for Applied Ethics at Santa Clara University, there are five ethical approaches one can use when making a decision: the utilitarian approach, the rights approach, the fairness or justice approach, the common-good approach, and the virtue approach (Velasquez, Andre, Shanks & Meyer, 1999).

Utilitarianism, developed in the 19th century by Jeremy Bentham and John Stuart Mill, argues that decisions ought to be based on the greatest balance of good over evil. In incorporating the utilitarian approach, the ethical action is the one that provides the greatest good for the greatest number of people (Velasquez et al., 1999). The next standard, the rights approach, was developed by the 18th century philosopher Immanuel Kant, who believed each individual has the right to choose for himself or herself. Under this premise, human beings are distinguished from other beings by their ability to choose, without encumbrance, what they will and will not do with their lives, and it is an infringement of human dignity to manipulate or use others in a way so that they do not freely choose. In making decisions based on the rights approach, one must evaluate the actions and respect the moral rights of all involved, and, in doing so, one comes to the realization that actions are inappropriate to the extent that they violate a person’s rights (Velasquez et al., 1999). 

Originating from Plato more than 2000 years ago, the common-good approach focuses on the fact that the policies and decisions made are beneficial to all. Advocates of this approach urge others to view themselves as part of a community, and henceforth, to make decisions that would benefit the community rather than only the individual. Examples of the common-good approach include affordable health care and a clean and safe environment (Velasquez et al., 1999).

The fairness approach, with its roots tracing back to the teachings of Aristotle, focuses on the question, how fair is the decision? This approach also concentrates on stamping out favoritism and discrimination since both are unjust forms of decision-making (Velasquez et al., 1999). The final approach to ethical decision-making, the virtue approach, upholds the notion that there are certain principles people should strive to attain. For example, virtues, such as honesty, benevolence, and integrity, enable one to reach his or her potential. When making an ethical decision using the virtue approach, one might ask, what is the right thing to do? Or what decision would manifest the moral virtues of the community? (Velasquez et al., 1999).

Although it would be strictly speculation, one could argue that when Thomas Welsh was approached to pay IOC members in 1991, his refusal was based on the virtue approach. After all, how better could he demonstrate the virtues of honesty and integrity of Salt Lake City than refusing to pay a bribe to officials? Certainly Welsh believed that making a cash payment was not the moral or proper thing to do. 
However, what ethics did Welsh use when he later made the decision to break the rules of the USOC and IOC and give extravagant gifts to voters? Although the common-good approach and the rights approach are improbable, one could certainly argue that Walsh used utilitarianism. If using this approach, which focuses on the tangible benefits received more so than the common-good, then Welsh would be providing the greatest good, the chance to hold the Olympic Games, to the greatest number of people, the population of Salt Lake City. As former city councilman said, “It sounds corny, but it was about bringing the city out of isolation. We were so excited about the possibilities the Games could bring for the good of the community” (Pound & Johnson, 1999). After all, by hosting the Winter Games, Salt Lake City would not only be brought out of isolation, but would reap the long-term financial benefits of hosting a modern Olympic Games.

We could also argue for the fairness or justice approach as to why Welsh and associates opted to pay for votes. If adopting this ethical standpoint, then the organizing committee could have thought it was only fair that they shower the IOC members with gifts and cash. That was what Nagano, the city that had beaten them in 1991 by a paltry four votes, had done when they spent millions to entertain the voters. And why wouldn’t it be fair to spend on the voters lavishly? Not only had Nagano done it, but other cities as well. Charlie Battle, a top executive for the Atlanta Committee for the Olympic Games, admitted to improprieties by the organizing committee, such as giving sets of golf clubs, but maintained that there was nothing wrong in doing so (“Report: Atlanta,” 1999). “Hey, that’s what you do,” Battle said. “… We didn’t do anything illegal, immoral, unethical, or what I felt was improper given the context of lavish hospitality and entertainment that was the accepted route” (“Report: Atlanta,” 1999). Battle continued in saying that the organizing committee “conducted our bid in the spirit of what we felt like were the guidelines that were given to us” (“Report: Atlanta,” 1999). In a similar fashion, Nagano mayor Tasuku Tsukada said that their organizing committee had little choice but to bend the rules to accommodate the wishes of IOC members (Wilson, 1999). Finally, Martin Saarikangas, head of the Helsinki push for the 2006 Winter Games, thought that new sanctions banning IOC travel was unfair to bidders (“Report: Air,” 1999). No matter what ethical decision-making process was employed by Welsh, few can argue that breaking direct guidelines of the USOC and IOC was a totally immoral or unethical course of action.

Future directions

So where do the Olympic Games move from here? What changes have been and will be made to add respectability back to the entire bid process? Political pressure, most of which has come from United States Senate Majority Leader George Mitchell and the panels which he has chaired, has forced the hand of the IOC. According to Mitchell, “Despite the fact that everyone recognizes the Olympics as a huge commercial enterprise, the International Olympic Committee and its constituent organizations lack the accountability and the openness needed to keep up with the role the Olympic Games play in the world today” (“IOC Considers,” 1999). Finance reform and tighter control over both the USOC and the IOC headline the major agendas of lawmakers and legislative panels. Even former U.S. Secretary of State Henry Kissinger, Peter Ueberroth (organizer of the 1984 Games) and Italian businessman Giovanni Agnelli have been asked to sit on a committee to help reform Olympic wrongdoings.

Strategic changes can also be witnessed in the promoting efforts of cities aspiring towards hosting the Olympic Games. For example, Dallas, Texas, has started preparations in anticipation of hosting the 2012 Games. Inspection of their Web site, www.dallas2012.org, reveals a distinct and conscious shift away from the normal methods of planning a bid process. For instance, the committee outlines the structural changes they have made in comparison to the bid “norm.” Marquee names, such as Dallas Cowboys owner Jerry Jones, are listed throughout the site in an attempt to demonstrate community support. Nowhere throughout the site is any mention of previous wrongdoings by other bid committees. Lastly, ‘Dallas2012’ has adopted a utility approach to their campaign as they continually mention the good that hosting the Games will bring to the people of Dallas and the Dallas-Fort Worth Metroplex as a whole. This shift in marketing strategy can be expected from other U.S. cities as well, at least until the tarnish is completely removed from the Olympic rings.

Indeed, the scandal in Salt Lake City has put a stain on the Olympic community. It is by no means a stretch of the imagination to conclude that the vast commercialization and tremendous dollar amounts associated with the Games since 1984 contributed, at least partially, to the corruption of the SLCOC and other organizing committees as well. Further, a change in ethical considerations was witnessed as Welsh and others involved in the SLCOC moved from a virtue approach to perhaps either utilitarianism or the fairness standpoint. Lastly, the repercussions of the scandal can be espied not only in the call for legislative action but in the strategic choices of other cities wishing to host the Games. Perhaps someday, the tarnish will be removed from the Olympic rings. 

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